Review of the week: Halifax Web Saver Extra

Where can you get the best return on your savings?

With savers facing an uphill struggle as they try to find homes for their money which offer a decent return in this low interest-rate environment, savings rate reductions are the last thing they need. Halifax recently reduced the rate on its Web Saver Extra account, but it’s still offering one of the leading rates, so remains an attractive option.

However, the highest rate of 2.80% is only available to existing current account customers and there are, however, a number of catches you should be aware when weighing up whether or not this is the best account for you. Read on to find out more…

What’s the deal?

The Web Saver Extra Account is an easy access account that currently pays 2.80% to existing current account customers - one of the highest easy access rates on the market. You don’t have to have a Halifax current account to open a Web Saver Extra account, although the rate for non-customers is slightly lower at 2.60%.

The rate doesn’t include an introductory bonus, although it is variable so it could change at any time. Any changes to the rate will affect new and existing customers alike.

You can open the account with as little as £1 and pay money in whenever you want.

The account is managed online and monies can be transferred to and from an existing Halifax current account or to accounts elsewhere, although it must be noted that if you choose to transfer money outside of the Halifax brand then transactions may take longer to process.

Any catches?

The rate differential for Halifax current account and non-current customers is obviously something to be aware of.

However, the other main thing to watch out for is the withdrawal restrictions. This is an easy access account and you can get at your money whenever you want to – but you may be penalised for doing so. Only one penalty-free withdrawal is allowed each year. If you choose to dip into your funds more than once over the year then you will be penalised with a loss of 30 days interest on the amount withdrawn.

Verdict

The fact Halifax current account customers receive a higher rate of interest than non-customers is indicative of the market at the moment. We’re seeing an increasing number of providers restricting some of their products to existing customers, or offering them preferential rates as a ‘reward’ for loyalty.

Whether it’s the 2.80% or 2.60% rate you qualify for, Web Saver Extra is one of the leading easy access accounts available at the moment. However, for some, the fact you can only make one penalty-free withdrawal year will be too restrictive (particularly as there are other accounts offering similar rates that allow unlimited withdrawals).

Others may be happy to accept this restriction. It will be suitable for those who shouldn’t need to get at their savings over the next 12 months, but want to keep it accessible just in case. It may also be attractive to those who want a deterrent that stops them from dipping into their savings too frequently.

Top Tip

If the Halifax Web Saver account is the right one for you but if you don’t have a current account with the bank, then why not switch your current account as well? Not only will you benefit from the higher rate of interest, but you could also earn more on your current account. With the Halifax Reward Account, for example, you’ll have £5 a month - £60 a year - credited to your account as long as you deposit £1,000 a month.

Given most people are earning 0% or 0.1% on their current account, it makes sense to make the money you hold in that account, as well as your savings, work harder.